Driving Value Across the Enterprise: Health Execs Have a Laser Focus on Analytics | Deloitte US has been saved
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By Steve Burrill, vice chairman, US health care leader, Deloitte LLP
The ability to tap into data analytics has long held the promise of guiding hospitals and health systems toward clinical, operational, and financial efficiencies. Hospitals and health systems are generating mountains of data, and data-driven decision-making could help to transform their businesses and the care they provide to patients.
The term “analytics” refers to the systematic use of technologies, methods, and data to derive insights and to enable fact-based decision-making for planning, management, operations, quality, safety, measurement, and learning. Globally, the health care analytics market has tripled over the past three years—from between $4 billion and $5 billion in 2015 to about $15 billion in 2018.1 The market is expected to top $50 billion by 2024.2
But taking advantage of data analytics goes beyond investments, developing a corporate vision, and buying the appropriate software. Health plans and health systems also need expertise. Late last year, the Deloitte Center for Health Solutions surveyed 56 health system chief information officers (CIOs), chief technology officers (CTOs), and chief analytics executives to understand the importance of analytics and where organizations are focusing their efforts. Nearly one-third of our respondents said they had a C-Suite position dedicated to analytics—up from just 12 percent in 2015. Over the next three years, 29 percent of health system executives expect to hire data scientists, and 21 percent intend to bring on visualization developers and/or data architects.
Most health system execs see analytics as the future
According to our survey results, 36 percent of health system executives consider analytics to be an important part of their organization’s strategy, but the majority (84 percent) expect it will be essential three years from now.
We also found that among health systems:
While interest in analytics and adoption of supporting technology has clearly accelerated over the past three years, some health systems are further ahead than others. Although 84 percent of executives told us that they think analytics will be extremely important in the next three years, about 30 percent of organizations do not have an integrated analytics strategy. This could be a missed opportunity. According to a separate survey of hospital and health system leaders conducted by HIMSS, 57 percent of executives said they are using predictive analytics, and they expect the technology could reduce organizational costs by at least 15 percent over the next five years.
Health plans see analytics as a differentiator
Similar to health system executives, a majority of health plan leaders (67 percent) said data analytics is extremely important to their organization as a competitive differentiator, according to a 2017 Deloitte survey. A health plan with a large Medicare Advantage (MA) book of business attributes its consistently high performance on Star ratings to its analytics. Dedicated analysts keep constant watch on data that drive specific Star measures. If they see a downward trend, or if the tolerance threshold for that measure is crossed, the analysts raise the issue with the internal operations team (such as medical management) that can intervene and correct the trend. Information gleaned from claims data can lead to increased efficiencies, improved affordability/reduced medical costs, or enhanced customer engagement/experience, they said. About 75 percent of our health plan respondents expected their analytics spending would increase in the year ahead.
Hospitals and health systems that are lagging their competitors should consider developing a strategy to incorporate analytics. Health systems that already have mature analytics capabilities could move further ahead by incorporating artificial intelligence (AI) and predictive analytics. Here’s a look at how analytics are being used:
Hospitals and health systems are increasing their use of data sources and are expanding the types of data sets they use for analytics. According to our research, in 2018, the top three external data sources that were integrated into analytics were: health plan claims (73 percent), US Centers for Medicare and Medicaid Services (CMS) data (73 percent), and financial benchmarking data (71 percent). The use of social determinants of health (SDoH) data is expected to grow most in the next three years: While 38 percent of respondents said their organizations use it currently, 77 percent anticipate they will use it in three years.
Analytics is no longer relegated to the IT department. As the health care sector continues its march to a value-based model, the ability to tap into data analytics will likely become even more critical. During the past three years, we have seen bigger investments in analytics infrastructure, resources (dollars and people), and scope. Over the next three years, the majority of our survey respondents expect analytics to become even more critical.
1. IQ4I Research & Consultancy, Healthcare analytics global market, 2014; MarketsandMarkets, Healthcare analytics market by type (predictive, prescriptive, cognitive), application (clinical, RCM, claim, fraud, waste, supply chain, PHM), component (service, software), delivery (on-demand, cloud), end user (payer, hospital): Global forecast to 2024, accessed March 12, 2019; ResearchFox, “Healthcare analytics market outlook,” February 2015.
2. Jeff Lagasse, “Healthcare business and financial analytics market to hit $50B by 2024,” Healthcare Finance, accessed March 12, 2019.
Steve, a partner with Deloitte & Touche LLP, is the vice chairman and national sector leader for Deloitte’s Health Care practice. He leads a multi-disciplinary team who serves clients through consulting, advisory, audit, and tax services. Steve also leads the overall strategic direction and market eminence of the health care sector, including client-facing leaders’ development and succession, business development efforts, and cross-functional go-to-market strategies. With more than 33 years of experience, Steve has served clients across the health care spectrum–complex large systems, academic medical centers, children’s hospitals, and single location entities–and has led large transformational projects involving acute care hospitals, ambulatory operations, clinics, and physician practices.